Two entries in Kansas City University of Medicine and Biosciences’ most recently filed tax return shed some light on the legal battle between the osteopathic school and its former CEO, Karen Pletz.

On the first page of the nearly inch-thick Form 990, the school reported spending $3.5 million on fund-raising expenses for the fiscal year that ended June 30, 2009.

On the same page, the 990 reports that $1.3 million in contributions and grants were raised during the same span. Diving into the details, only $784,000 came from nongovernmental donors — in other words, those private sources a school most likely needs to spend money to cultivate.

“We have seen that that has been a trend,” Dr. Danny Weaver, acting CEO and chairman of the KCUMB board of trustees, said in a recent interview. “We do know now from the (special board) investigation that a lot of these costs that went into the fund-raising cost center ... weren’t directly related to fund raising.”

Pletz, who was not immediately available for comment, has countersued the university for $2 million that she contends still is owed to her. In the school’s court filings, it alleges that Pletz spent more than $2.3 million of university money for personal expenses and elevated her annual compensation to about $1.2 million by altering documents and misleading consultants.

Weaver said the $2.3 million figure cited in the litigation is “a fluid number” — like some other numbers involved in the case.

Another example relates to KCUMB’s endowment fund. Pletz frequently has been cited for raising the school’s endowment from $0 to $70 million during her 14-year tenure. Weaver acknowledged that may have been one reason the pattern of excessive fund-raising expenses escaped careful scrutiny.

When such scrutiny finally was applied, by independent auditors and lawyers who completed the recent 990, it was learned that the endowment actually contained $6.7 million, Weaver said.

“That’s just (baloney),” said Charles German, a partner with Rouse Hendricks German May PC who represents Pletz.

Every nonprofit views its endowment in a different way, German said, and when Pletz was CEO, general reserves were considered part of the endowment.

“If you look at the general reserves, plus this set-aside they have now re-labeled as their endowment, it’s up in the $50 million-plus range,” German said, adding that it had dipped from $70 million because of the depressed investment market.

Weaver responded: “If you looked at the highest we ever reached, including everything — reserves, operating fund and endowment — we only reached $54 million, which is $16 million less than (Pletz) claimed. ... It’s just her lies.”

German denied wrongdoing by Pletz but said unintentional financial errors may have been made because of a sloppy accounting system. That system not only allowed Pletz to pay for school expenses and get reimbursed later but also allowed Pletz to reimburse the school for personal expenses put on the university credit card.

Sometimes, German said, “there was like a three- or four-month delay between when people would have to account for cash advances and travel expenses, (so) there were just a number of situations where mistakes were made.”

Weaver acknowledged another reason Pletz allegedly got away with ill-gotten gains for so long. Before the most recent 990 was filed, the law didn’t require the board to review the detailed 990s. So “we never did” in the past, he said.

Some find it hard to believe that the KCUMB board would not review 990s, whether mandated or not, and that the board didn’t — as the latest 990 states — review individual expense reports, either.

The board’s role was to establish policies and make sure budgets were met, Weaver said, but it delegated “everyday function(s)” such as expense-report review to the administrative team.

“Even if (board members) did review the reports,” the latest 990 adds, “they would not have been able to discover that the information on the expense reports was fraudulent.”

However, it could be argued that the board might have sniffed something wrong had it reviewed past tax returns.

KCUMB board member Terry Dunn, who has been leading the special investigation into Pletz’s spending, declined to comment on how the alleged fraud escaped the board’s detection.

But the JE Dunn Construction Group CEO, known for being a scrutinizing board member, did have a response when asked how he could have been fooled.

“I would say this,” Dunn said, “I came on the board in the latter part of 2008, so I’m the newest member of the board of directors. And right now, my sole focus is to make sure we’re moving in the right direction from a board and a leadership standpoint.”

Meanwhile, some are questioning the ability of that leadership, which includes a dean being investigated for the admission of an allegedly unqualified student.

“No, the million-dollar-plus salaries and trips to get face-lifts disguised as alumni relations aren’t still happening,” said a June 8 letter writer who claims to have written a July 2007 letter blowing the whistle on Pletz, “but the mistakes keep on coming, just like the oil keeps gushing out of the Deepwater Horizon oil rig in the Gulf of Mexico.”